Miami New Times' Expose on the South Florida Rental Biz | Gotham Dream Cars

Miami New Times' Expose on the South Florida Rental Biz

December 8, 2008

The Miami New Times recently published one of the most comprehensive pieces written to date on the shady state of the exotic car rental industry in South Florida.  We spent a good amount of time with author Gus Garcia-Roberts, and we're pleased to report that Gotham Dream Cars received extremely complementary remarks in what is otherwise a scathing review of the industry.

A highlight, with the full article below..."After slogging through this lawless industry long enough, stepping into the Gotham Dream Cars complex can be a bit startling...The cars are properly insured for rental, an on-site mechanic takes care of the fleet's constant minor repairs, and the personable employees wear black-and-orange polo uniform tops.  It's all so shockinly...business-y."

Budget Ballin'

To hell with the economy! South Florida's lawless exotic rental car industry keeps rolling.

By Gus Garcia-Roberts

Published on December 03, 2008 at 10:54am

• 
  

  Ian Witlen

  
  
  

  Luis Elera claims his exotic car rental business was the first on the crowded airport strip.

  
  


• 
  

  Laura Massa

  
  
  

  Strange dealings: It's unclear who owns Biscayne Boulevard's tiny Exoticars.

  
  

He pushes a button controlling the vehicle's hydraulic system and jolts with surprise as the car lifts a few additional inches from the street. "Gangsta!" he declares.

But Raul is about as gangsta as Enrique Iglesias. He's a prep-school product who spent his childhood in English-speaking private academies in Caracas — halls of ivy where bodyguards await their young charges outside the gates. On this Friday afternoon, he's in Miami to celebrate his graduation from a Venezuelan university with an engineering degree.

Wearing an Ed Hardy T-shirt and moon-faced DKNY shades, hair gelled into tight curls above a high forehead, he's trolling for beautiful women on the neon-and-salt-air postcard that is South Beach's Ocean Drive. Lil Wayne, piped in from 99 Jamz, drones ubiquitously over rattling bass. Welcome to Raul Regalado's own personal rap video, paid for by Dad's American Express.

Raul and older cousin Juan spent all last night at the Seminole Hard Rock's blackjack tables. Today the two have rented the Lamborghini for $1,250 plus tax. While Juan sleeps it off upstairs at the Ritz-Carlton, Raul ventures through South Beach, jerking the car like a go-cart as he struggles with the paddle-shifters.

But in this gaudy gridlock, quarter-million-dollar rides are common, and Raul catches only a few glances from female pedestrians. Seeking liquid courage, he maneuvers the car into the valet spot at Mango's Tropical Café.

As barely dressed salsa dancers do their best to enliven the half-empty club, he sips a Corona near the bar, smiling lavishly at every woman he locks eyes with. Mercifully, after half a beer, a light-skinned young Latina bursting from a tight pink dress smiles back. A Louis Vuitton clutch bag rests on the bar next to her.

Raul approaches and speaks in rapid Spanish, at least once nodding solemnly at the Lamborghini visible at the curb. Her name is Nicole. She's 25, from Mexico City, and in town with friends for a week.

Soon she gives Raul her room number at The Raleigh and they make plans to go clubbing. Jerking the car back to the hotel, he's ecstatic. "Did you see her face when she saw the Lambo?" he demands.

What Raul doesn't know is that his rental — like many in South Florida's exotic-for-a-day trade — is probably illegal. The car's real owner, a financially stretched West Palm Beach music executive, struck a deal with a Miami broker several months ago: sacrifice a few weekends a month with the Lamborghini to make the almost-$3,000 monthly payments.

Of course, the broker doesn't have proper rental insurance, so the deal constitutes insurance fraud — a crime that investigators say is rampant in South Florida's renegade exotic rental car industry.

The music honcho can only beg of the broker: "Make sure they take care of my baby."

When shopping for a vehicle that costs more than your average recession-era house, if even for only a day's use, you might expect the white-glove treatment. But Orlando Medina — a gigantic deskbound Big Pun doppelganger and manager of American Luxury Auto Rental on the corner of NW 25th Street and Le Jeune Road — runs the business as if he were hawking used electronics.

"Oh, you want to rent from us when you haven't paid for the last car?" he booms into the phone at a delinquent customer. "How do you say it in Kreyol: 'Pay me my money!'"

Then he changes his tone, laying a trap. "Okay, okay, just come in," he coos. "We'll see what we can work out."

Medina's favorite at-work activity is shooting the shit about his 11 years in the industry. There was the time owner Luis Elera tracked a stolen Ferrari with a built-in GPS to a container about to be flown from Miami International Airport. Or how about the rented $45,000 Cadillac CTS impounded as evidence after it was used in a murder? Or the stolen Hummer, recovered by authorities in Haiti but now stuck in limbo at the Port-au-Prince airport.

The rental lot outside this no-frills glass-walled office is jammed with about 300 luxury (think Lexus) to exotic (Ferrari) vehicles. It anchors what is known as "the strip," Miami's vehicular version of New York's Diamond District: a scattershot of high-end rental car shops. Since the vehicles are usually delivered to clients who find the businesses online or in the phone book, little care is put into the lots. Bentleys, Rolls Royces, and Ferraris are strewn among potholes, orange cones, and modest storefronts.

This is the epicenter of an industry that has found a natural home in South Florida, the nation's capital of shameless excess. The area's exotic rental car market is rivaled only by Los Angeles, New York, and San Francisco.

Carefree Lifestyle, a boutique on Fifth Street in South Beach, deals in what might be the quintessential local cottage industry. It rents not only cars but also mansions, and it gets clients past the velvet ropes at exclusive nightclubs. "Miami is the ideal place for a business like this," says Matt Fouhy, a former professional poker player turned Carefree manager. "I don't think there's a better city in the world for it."

The local high-end car rental market can be traced back to the Fifties, when the Rat Pack tooled through Mid-Beach in Caddy convertibles. It gestated in earnest during the Cocaine Cowboys-ruled late Eighties. "The dealers liked to change cars every few days," American's Elera wistfully remembers. "You'd get a hundred-dollar tip just getting them their car."

• 
  

  Laura Massa

  
  
  

  Noah Lehman-Haupt is the MIT-educated wünderkind CEO of Gotham Dream Cars.

  
  


• 
  

  Laura Massa

  
  
  

  Melisa Conzé tries out a Lamborghini before the Dream Car Tour.

  
  

Renters' motivations range from test-driving before a purchase, to "being a ho on South Beach," as Medina puts it, to that distinctively South Floridian pastime: trying to acquire money by appearing to already have it. Most commonly, though, customers — the overwhelming majority are male — want these attention-grabbing vehicles for the same reason male parrots sprout glowing plumage. Carefree's Fouhy estimates that 75 percent of his clients are looking to pick up women.

That number presumably includes those who rent to avoid detection when cavorting with mistresses: the infidelity demographic is so large that some managers profess to be specialists. "Some of our customers already have a Bentley in their garage," says Moses Zamudio, a manager at Image Rental Car, a stand inside a Fort Lauderdale Rodeway Inn. "But they rent from me because I know them and I'm discreet. They don't want to come to the counter where everybody can see them. I'll leave it with a valet or at a hotel, so they'll be sure they're not being tracked."

Cheaters — and all the other renters — pay exorbitantly for this service. Prices range from $195 per day for a Hummer H2 to $1,600 and up for a "true exotic" such as a Lamborghini or Ferrari. One company, Gotham Dream Cars in Dania Beach, offers a Saleen S7, a $400,000 supercar, to elite clients. Until a recent price cut, a weekend rental cost $7,740.

In these dire financial times, the industry faces a potentially mortal foe: sensible spending. After all, a renter can have a Japanese compact for one-20th the price of an Italian exotic. Follow a display of exotic cars into an airport-area storefront such as Tolsy Luxury Cars — a bright yellow cube of a building on NW 25th Street — and you're likely to find some long faces. "How about you tell us how we're going to make some money?" a manager rebuffs New Times when asked for an interview, a nearly empty dollar counter whirring behind him.

It's difficult to track down statistics on the niche industry, but several owners say business has recently plummeted 30 percent or more. Most ominously, it seems South Floridians are beginning to resign themselves to their class realities. "The local business has all died off," Medina says. "Before, it was 80 percent locals, 20 percent tourists from the airport. Now it's the opposite."

Rental shop owners have responded by slashing prices, sometimes by more than $500 a day. A Maserati Quattroporte that used to go for more than $1,000 daily can now be had for $695. And that Saleen supercar? Gotham is offering it up for a song: $6,450 a weekend.

Max Shelikhov, a 25-year-old frequent customer of Prestige Luxury Auto Rental in South Beach, is taking advantage of the new reality. A self-made entrepreneur in the "import/export" business, he rents a red Ferrari 430 for his twice-monthly weekend jaunts to Miami, where he has an apartment on Ocean Drive. "I like to spoil myself from time to time," he says. "I earned it myself, so I get to spend it myself."

For a long weekend to celebrate the New Year, he has reserved eight vehicles that constitute a Master P-music-video-quality motorcade for his fiancée, parents, and extended family. "I'm getting a couple of Escalades, an S-Class Mercedes, a Bentley, a [Rolls Royce] Phantom ...," he casually recounts. "They all have to be larger vehicles, since it's for family."

He's not sure what it will cost. "I'm assuming they'll have a special," he speculates. But if current prices hold up, such a fleet will run near $20,000 for a few days.

You might say Shelikhov is an ideal customer. "With the recession, yeah, I'm worse off," he explains. "I could probably go to Enterprise and rent a station wagon or something, but I think once you go Ferrari, it's hard to go below that again. Sometimes when I'm not in the mood to splurge, I'm perfectly fine with settling for a Mercedes or a Cadillac Escalade."

On a warm Monday afternoon in November, a man who calls himself Mosabe is tidily dressed in a blue faux-cowboy shirt, jeans, leather loafers, and large Dior sunglasses. His 2006 yellow Lamborghini Murciélago howls through steady traffic traveling north on I-95, out of downtown Miami. His face is delicate, with wide, effeminate almond-shaped eyes under neatly tweezed brows.

And he drives like he just learned his house is on fire. Going 60 mph, which feels something like an idle in the 640-horsepower Murciélago, he aims at a gap, floors the gas pedal, and zooms through with the engine roaring like it's coal-powered. The air conditioning is broken — it might cost $15,000 to replace — and the hot air blasting through open windows mixes with the heat from the engine to turn this vehicle into a $280,000 convection oven.

In the midst of the maneuver, a cream-colored old-man Buick pulls in front of him without using a blinker. Mosabe hesitates half a second before pumping the brakes, and by the time the Lamborghini slows, he is one or two feet from the Buick. "I scared the shit out of him!" he yells over the churning engine, and laughs merrily. He then confides to New Times: "I'm only driving like this because you're here. If it was just me, I'd be going 35 right now."

• 
  

  Laura Massa

  
  
  

  For the Gotham Dream Car Tour, customers pay $895 to wheel this $1.3 million fleet through South Florida.

  
  

Mosabe seems exactly like the type of guy you would imagine behind the wheel of that audacious ride screaming past you on the interstate. He says he is a Dubai-born millionaire, the son of a self-made clothing magnate, and lives at Trump Plaza in Sunny Isles Beach. He is usually accompanied by a bodyguard — though not today — and is in the midst of commissioning a reality show about his recent move from New Jersey to Miami.

And he brags about clubbing with hip-hop producer Scott Storch. "We were up until 9 this morning," he says. "There were some women; we took them over to his place. Man, you wouldn't believe the things women will do for fame."

Before moving south, he says, he had a membership at the Classic Car Club in Manhattan, a $20,000-per-month privilege that allowed him to take out any of the classic or exotic vehicles in the showroom. When he moved to South Florida earlier this year, he began renting at Exoticars, a tiny shop on the ground floor of Bay's Inn, a dingy motel on Biscayne Boulevard at NE 35th Street.

He rented so often that the business's owner, a man named Jose, told him it would make more sense for Mosabe to buy into the company. Mosabe contends he purchased two of the Lamborghinis that now sit on Jose's lot, including this yellow Murciélago. He seems to consider it a small investment. "My wife was always yelling, 'Why do you rent?'" he says. "She's right. And Jose's a great guy."

The white-knuckle ride ends as Mosabe glides to a halt just east of Opa-locka, outside a gutted house where shreds of wallpaper, rotten wood, and other debris form a mountain on the curb. This, he says, is his new enterprise: a "three-quarter-way" house for recovering addicts and substance abusers. He paints it as an altruistic venture: "This isn't about making money."

His business partners are two semi-homeless men in filthy T-shirts, recovering addicts themselves, who live in the house while they strip it. "In a world of scumbags," one of them, Larry Bernstein, says of Mosabe, "this guy's a prince."

Indeed, Mosabe's practiced veneer is that of new Miami royalty. He is like many others in the exotic rental car business: charming, egotistical, magnetic — and upon closer inspection, an absolute mirage.

A couple of weeks after the ride to Opa-locka, he has reversed his opinion of his new business partner. "Jose's a piece of shit," Mosabe says abruptly over the phone. "Basically he stole my money and he took my cars."

He doesn't go into much detail — "look, it's a long story" — only repeating that Jose refuses to give back the Lamborghinis and owes him $50,000 on top of that.

Jose — a usually coolly detached man who wears button-down shirts open to the chest, sports a gray ponytail, and also refuses to give his last name — is enraged. "I never had a business partnership with the guy," he says. "The guy's a fucking con artist. The guy's talking about Scott Storch. The guy doesn't have a pot to piss in."

No business named Exoticars at the Bay's Inn address is listed in state records. But a shop sharing the same phone number is Extreme Exotic Car Rentals. Among the names on that title: Mosabe Al Homsi. No Jose is listed.

Asked how Mosabe could be listed if they don't have a partnership, Jose hedges and then puts New Times on hold. He never returns to the line. Despite Jose's "con artist" accusation, Mosabe Al Homsi does not have a criminal record.

Mosabe calls a couple of weeks after the tour of his three-quarter-way house. He maintains that Jose ripped him off, but now says he never claimed to own the Lamborghinis or even invest in Exoticars. "I don't have anything to say about that," he tells New Times.

But he does have some news: He is launching his own luxury rental car company. He says he has the starter cars — a couple of BMWs, a Mercedes, a Porsche 911 — and a name: Luxury Status Auto Rental. "Because fuck Jose," he adds. It's a strange reason to start a business, but Mosabe seems determined.

Nino Zarzuela, owner of Empire Rental Car on Collins Avenue in South Beach, long ago stopped renting only cars. He calls himself a "lifestyle broker." "We're like a concierge at a five-star hotel," he explains. "We do packaging. We provide mansions, yachts, helicopters, charter planes, whatever you want. Our job is to pamper you."

Over the two years he has been in business, his clients have included Jamie Foxx, Shaquille O'Neal, T.I., Birdman, Young Jeezy, and Wyclef Jean, he says. To illustrate the lengths to which he will go to please a client, Zarzuela tells the story of a Turkish princess who contracted him to set up a four-month Miami stay. He leased her a mansion on Normandy Isle and procured cars for her entire entourage — an Aston Martin, a Mercedes, two Escalades, and two Hummers. And he set up grooming sessions for her dogs — quite a feat, because she traveled with 60 of them. "From miniature Yorkies to bulldogs," Zarzuela says. "Any type of dog, she had one."

But the princess wanted one more pup — specifically a dog she saw on an enthusiast's website owned by someone in Texas — "a rare Yorkie," Zarzuela remembers. So she bribed the owner into giving up the pet for $20,000 and sent a bodyguard on a trip aboard a Zarzuela-chartered flight to pick up the new pet.

• 
  

  Ian Witlen

  
  
  

  Luis Elera claims his exotic car rental business was the first on the crowded airport strip.

  
  


• 
  

  Laura Massa

  
  
  

  Strange dealings: It's unclear who owns Biscayne Boulevard's tiny Exoticars.

  
  

By Zarzuela's count, the princess spent $35,000 procuring the dog. She paid Zarzuela $200,000, he estimates, for his services. "I ever tell you about her?" he asks his assistant, Ray Ramirez, while grabbing a bottle of water from a mini-fridge next to his desk. "Crazy bitch."

On his business card, he casually eschews his last name, marking it with only "Nino." A public records search reveals the probable reason. In 2003, Zarzuela (his real first name is Guaroa) and two accomplices were title clerks at Baumgardner Auto Tag Agency, a government-authorized Dade County vehicle registration company. In July that year, investigators busted the trio for knowingly registering 50 stolen cars, ranging from an '88 Nissan Sentra to a brand-new Mercedes S500. Zarzuela was sentenced 24 months in state prison for vehicle title fraud and dealing in stolen property, both felonies.

Such backgrounds — or worse — are typical in the trade, says Tony Fernandez, a special agent at the National Insurance Crime Bureau, headquartered in Virginia. "A lot of them have done auto scams before," he says. "Some of them have been involved in drugs."

These hustlers are enticed by an underregulated enterprise that, at a glance, seems like an exciting way to quickly turn a profit. "They get into the business for the wrong reasons," says American's Medina. "They want to be the man with the Lamborghinis. They don't know how hard these businesses are to run."

The biggest problem: it's nearly impossible to get insurance. Large companies see exotic rental cars as essentially unprofitable. Valuable, superpowerful sports vehicles, perhaps, shouldn't be in the hands of inexperienced drivers. So when an underwriter agrees to cover an exotic rental car, the cost can range from $20,000 to $50,000 per vehicle yearly.

So many rental shop owners bypass insurance altogether. They borrow cars from rich owners and rent them out illegally to customers like Raul who don't know any better. These arrangements become disastrous when a renter crashes and the insurance company goes to the original owner for an explanation. "That's when you hear: 'Oh, I was just loaning it to my friend,'" says Fernandez. "That's a big one."

If all else fails, declare bankruptcy and set up shop elsewhere under a different name. The airport strip has become ground zero for such undead enterprises. Within months, storefronts open, close, and re-open down the block with a new name. New businesses are registered by phantom owners with clean records. The listed address of one business takes you to the storefront of another, or face-to-face with a barren street corner.

The lawlessness isn't just a South Florida problem. "There are, in fact, very few legitimate exotic car rental businesses in the United States. There may be six or seven that I know, positively for sure, are legitimately insured and licensed," says Ron Sturgeon, owner of Dallas-area DFW Elite Auto Rental. He describes a phenomenon familiar to anybody who has tried to track down a few businesses on our airport strip: "There's only one other place in Dallas, but the website lists an address that leads only to a little office, so I know that they're not legitimate."

After slogging through this lawless industry long enough, stepping into the Gotham Dream Cars complex can be a bit startling.

The Dania Beach showroom, located down an industrial alley, is still under construction after the company's move from Delray Beach. The desks haven't even been moved in yet, so printers and computers are strewn on the floor like a child's neglected playthings. But the six candy-painted Lamborghinis outside, bat-wing doors flung upward to snare the attention of motorists on the highway, are owned and paid for, as are all the exotics Gotham rents.

The cars are properly insured for rental, an on-site specialized mechanic takes care of the fleet's constant minor repairs, and the personable employees wear black-and-orange polo uniform tops.

It's all so shockingly ... business-y.

In fact, this year Gotham Dream Cars was ranked number 275 on Inc.'s list of the nation's fastest-growing companies. Owner Noah Lehmann-Haupt made the magazine's "Top 30 Entrepreneurs Under 30" list.

Lehmann-Haupt estimates he met with a hundred different underwriters during a yearlong struggle to insure his fleet. "I had to show them I have real business experience, I'm not a former club promoter trying to make some quick cash," he says. "I am not here to have my entire fleet burn up in a mysterious garage fire — which happens, so it's hard to blame them for their reluctance.

"I don't want to compete with the guys in South Beach or over on the airport strip," continues the 30-year-old entrepreneur, who resembles a mousy Tom Hanks. He is wearing his daily ensemble of a blazer over a button-down shirt, tidy jeans, leather shoes, and a sleek black bauble of a wristwatch. "I don't have to break out the Rolodex of wealthy friends when you ask for a certain car. I'm not renting out Scott Storch's private collection."

But Lehmann-Haupt did get into the exotic trade on something of a lark. The Riverdale, Bronx native was already a success by the time he was age 25, having sold a financial software company, TruExchange, that he developed as a 20-year-old MIT junior. When he tried to rent a Ferrari and found no companies in New York "worth a phone call," Lehmann-Haupt decided to fill the niche. "I thought this would be a hobby business," he says. "I thought I would pay my apartment rent and maybe make a little cash."

• 
  

  Ian Witlen

  
  
  

  Luis Elera claims his exotic car rental business was the first on the crowded airport strip.

  
  


• 
  

  Laura Massa

  
  
  

  Strange dealings: It's unclear who owns Biscayne Boulevard's tiny Exoticars.

  
  

Instead he expanded to South Florida last year and is now eyeing California with the hope of selling the franchise once it becomes a national brand.

But even a Bill Gates-esque business acumen can't make him immune to recession. Recently he has dreamed up some interesting gimmicks. One particularly brazen idea — the Gotham Dream Car Tour — fills the highways of South Florida with adrenaline-giddy, underexperienced exotic drivers topping 100 mph as they hurtle through traffic on a November morning.

It's a simple idea, really, but also a brilliant way to separate customers from $895 without surrendering a vehicle for the night. A flock of drivers goes out with $1.3 million in six exotic cars — Ferraris F430 and 360, Lamborghinis Gallardo and Murciélago, a Maserati Granturismo, and a Mercedes SL65. Escorted by Gotham employees in lead and rear cars, they drive 300 miles of surrounding highway, up and down stretches of I-95 and Florida's Turnpike, with a brief turn into the Everglades. They switch every half-hour until they've each driven them all.

On a recent Thursday, most of the nine drivers tell New Timesthey were given the tour as an anniversary or birthday present. There's Jorge Reisin, a plastic surgeon whose son Raul, a Botox provider, gave him the tour for his 70th birthday — which you'd never guess from the perfectly unwrinkled, deeply tanned skin stretching around his designer shades. And there's Bentley-driving marketer Sidney Johns, age 27, who is taking the tour not because he's too poor to afford an exotic car, but because, he explains, "I can't drive them all at once!"

The lead car, an Acura, is loaded down with radar scanners and connected to the motorcade by two-way radio. It allows the front driver to warn the others of cops on the road — implicit permission to speed that easily outweighs Lehmann-Haupt's pre-tour pleadings to the contrary.

When he slumps behind the wheel of the Ferrari F430 a couple of hours into the tour, Roland Murillo, a 31-year-old tagging along with Johns, slams the gas in a quest to top his personal mph high. Tapping the paddle shift at the right moment produces a jolting burst from the engine vents that sounds and feels like a jet hitting a new Mach. Other traffic seems to stand still. "We just got up to 160," he declares as he eases the pedal, offering up a sweaty fist to celebrate. His puffy cheeks quiver with adrenaline.

As the cars stream north on I-95 on the way to Delray Beach during one of the tour's last legs, an alarm sounds over the radio: "State trooper! State trooper!"

A roadside lurking cop has evaded lead driver Andy Ward's best efforts. He pulls over both Lamborghinis with a blare of siren and some practiced finger-pointing. Both drivers — plastic surgeon Reisin and a tourist from Georgia named Trent Taylor — were going over 100 mph.

Ward isn't particularly concerned. "I would've thought he'd go with the bright red Ferrari," he says of the cop as he pulls into a rest stop to wait for Reisin and Taylor. "But I guess he's a Lambo guy."

Fifteen minutes later, when the two drivers catch up with the rest of the tour, it is revealed they escaped with only $91 seatbelt tickets. "It could've been a lot worse," Taylor intones. Back in Georgia, he explains, he was arrested and had a motorcycle impounded for doing 135 mph in a 55 zone. His driving rights flashed before his eyes when he saw the trooper's lights.

Their bewildering luck does nothing to dissuade the notion that the cosmos favors the wealthy.

The Monday after Raul Regalado's trawling expedition down Ocean Drive, the Regalado cousins queasily pick at poached eggs in the lobby restaurant of the Ritz. It's 8 o'clock on a Monday morning, and their plane leaves for Caracas in five hours. After each swig of coffee, Juan frowns as if stifling nausea. It's been a very long weekend.

They hit every club on a list penned for them by a concierge: Mansion, B.E.D., Cameo, Set — homes to valets accustomed to seeing the same exotic cars driven by different owners. Juan estimates they put a paltry 30 miles on the Lamborghini before returning it Saturday afternoon.

"I don't want to go home to my Volkswagen, bro," he laments before turning back to his coffee.

One lingering question remains, and it seems Raul is dying to have it asked. How did the date go with Nicole?

"What's that saying — a gentleman never tells?" Raul coyly responds. His cousin shakes his head, knowing what's coming.

Five minutes later, Raul is digging through a backpack, looking for his digital camera. He is offering to show nude photos of his prize. New Times politely declines.